With automotive tariffs potentially adding thousands of dollars to the selling prices, U.S. car buyers may have to face a little bit of sticker shock soon. According to the Michigan-based consulting agency Anderson Economic Group, President Donald Trump signed the executive orders, causing the tariffs to possibly add prices by as much as $2,000 to $15,000 per vehicle, depending on how and where the cars are made.
The firm immediately began working on finding out the impact of these tariffs from the day Trump set them in place, 29th April. Patrick Anderson, the CEO of AEG, commented, “The adjustments provide significant and beneficial softening of the cost impact of these tariffs, at least for U.S.-assembled vehicles. However, the cost is still substantial for most American cars and trucks.”
Low, medium, and high tariff impact categories
AEG grouped the expected tariff costs into three categories:
- Low impact ($2,000–$3,000): These vehicles are assembled in the U.S. with mostly American parts. Examples include the Honda Civic, Chevrolet Malibu, and Ford Explorer.
- Medium impact ($4,000–$8,000): This group includes vehicles with more foreign components or complex supply chains, such as the Chrysler Pacifica, Ford Bronco Sport, and some Jeep and Ram trucks. The Chevrolet Suburban and GMC Yukon, assembled in Texas, fall here too, with slightly reduced tariffs under the new rules.
- High impact ($10,000–$15,000+): Luxury vehicles and many electric vehicles (EVs) assembled overseas will face the steepest costs. The Mercedes G-Wagon, BMW models, Range Rovers, and the Ford Mach-E are among those expected to carry the highest tariff burden.
Consumer sentiment changes as prices rise
In March, there was a sudden surge in the sales of vehicles, which Anderson attributes to consumer anticipation of being faced with an increase in prices. “Americans expect prices to go up because of tariffs, and the revised estimates confirm they are right,” he stated.
But GM took exception to AEG’s conclusions. GM spokesperson Jim Cain claimed the firm’s estimate for SUVs was an overstatement of the company’s tariff exposure. “Almost guesswork,” he said. GM declined to disclose its data, claiming it as proprietary information.
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Trump’s tariff revisions offer limited relief
Originally, there was a 25% tariff that Trump wanted on vehicles and auto parts coming in. But upon realizing that almost every car assembled in the U.S. relies pretty heavily on foreign parts, they adjusted the plan. According to the executive orders of April 29, owners of automobiles can seek partial tariff reimbursement: 3.75% of vehicle value in the first year and 2.5% in the next. After reaching a certain point, reimbursement is withdrawn.
This brings the Ford Explorer tariff down to $2,400 from $4,300 plus some, but the other side keeps prohibitive duties on imported cars, even if nearly all the parts for those cars come from the U.S. For example, the tariff on the Ford Mach-E, assembled in Mexico, is still over $12,000.
Despite how the system has been adjusted, the tariff remains, Anderson said. “The new policy does not significantly reduce the cost of the automotive tariffs for vehicles assembled outside the U.S.”
For further details, visit the full study at www.andersoneconomicgroup.com.
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